Sustainability is quickly becoming a byword in business and altruism has little to do with it, according to a global survey published by HSBC Holdings on Monday.
Almost a third of its 8,500 clients across 34 markets worldwide plan to adjust their supply chains over the next three years to make them more socially and environmentally responsible, HSBC said. Eighty-four percent of businesses are making changes to support cost efficiencies, while 84 percent are looking to improve revenues and financial performance, the bank noted.
“The main objectives for planned changes to supply chains are cost savings and increased profits,” it added.
Specific actions companies plan to take vary depending on the sector. Some are switching to renewable energy, and others are looking to reduce the amount of goods and components they move during manufacturing, HSBC said.
“As businesses explore and invest in ways to stay competitive for the future, the most forward thinking are already taking action,” Bryan Pascoe, global head of client coverage, said in a statement. “Transitioning to become more sustainable is not only beneficial for the environment and for society, but for the bottom line, too.”
Of its clients, 17 percent have already reduced the impact of their supply chains on the environment, HSBC said. Companies in emerging economies, such as in Asia, show greater enthusiasm on that front, with 21 percent of them planning to pivot to higher ethical standards over the next two years versus 17 percent of industrialized markets.
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Many are leveraging new technologies to do this, including blockchain and machine learning.
“New technologies…give companies greater control of their supply chains—they have a better sight of where the sustainability gaps are,” Pascoe said. They also contribute to greater transparency, something 26 percent of businesses rate as essential when selecting new suppliers, he added.
Equally important for enterprises is recognition by their peers. Eighty-five percent of respondents said they hoped to achieve a sustainability standard recognized by their sector or market, and 84 percent said it’s important to be perceived as socially or environmentally responsible.
Most of the respondents (38 percent) were based in Asia, HSBC said. Thirty-six percent of those surveyed hailed from Europe, 10 percent from North America and the remaining 16 percent from the Middle East and Africa. The annual revenue for the companies ranged from $5 million to over $100 million. Forty-two percent of businesses reported an annual turnover of between $10 million and $100 million, and 28 percent boasted revenues of more than $100 million per year.